During item-quality calculation, if an item's ilvl isn't equal to or greater than that item-type's Set or Unique ilvl, it will drop as a double durabilityMagic or triple durability Rare item (respectively) instead.

The ilvl, in conjunction with the Quality Level (qlvl), also limits which affixes can appear on the item, (It's what stops you from getting a Godly Quilted Armor of the Whale in the Blood Moor on Normal, for example,) as well as the maximum number of sockets an item can spawn with.

Monsters must be at least that high in level to drop an item with that affix on it. Your Clvl must be no less than 6 below the Qlvl to get it on an Imbue. The Clvl requirement is 3/4 the highest Qlvl affix on an item. The Qlvl also factors into gambling, modifiers you see on items for sale by NPCs, repair prices, and many other things.

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